LA Mayor’s Proposed Budget Doubles Down Against Unlicensed Cannabis Shops

Late last week, Los Angeles Mayor Eric Garcetti revealed his $10.6-billion budget proposal for the next fiscal year. The spending plan sets aside significant funds to target unlicensed cannabis retailers.

(For more about the battle against unlicensed shops in Los Angeles, read Cannabis Wire’s in-depth coverage here.)

The proposed budget comes on the heels of the city’s first pesticide-related suit against an unlicensed shop whose operators could, aside from getting shut down, be forced to pay $20,000 for each day of activity. Also, just days ago, a council member presented a motion that would make unlicensed operators responsible for all the costs associated with shuttering, including utility disconnections, materials used to secure the facilities, staff hours of those engaged in the enforcement efforts, and other operational costs. Mayor Garcetti’s proposed budget allocates 40% more funding for police overtime, including $10,000,000 for investigating and enforcing laws related to unlicensed cannabis businesses.

The city, in short, is doubling down on enforcement, but it is also expanding resources for its Department of Cannabis Regulation, which oversees the licensing processes for retailers. Under the proposed budget, the department will also get a boost, with $4,463,016 to cover salaries and other expenses, up from $3,712,168 in 2018-2019 (the Dept. recently had an increase in personnel).

The mayor’s proposed budget also has implications for stakeholders in the licensed cannabis industry, including advocates who’ve called for revenues to be used towards community reinvestment. In the summary that accompanies his proposal, the mayor pledges to establish a social equity program “so that those people who were affected by past adverse cannabis laws and would now like to participate in the new legal industry have every opportunity to do so,” as well as funding for a campaign to educate consumers on which stores are operating legally.

According to the spending plan, “cannabis businesses are projected to remit almost $40 million in business taxes to Los Angeles, in addition to sales tax receipts.” This amount, it goes on, “could potentially expand, if the City is able to move forward more expediently in its efforts to permit new cannabis businesses and better enforce against illegal sales.”

The Los Angeles City Council has until June 1 to accept, reject, or modify the proposed budget.